Are accurate performance indicators the key to better business strategy?
Learning from experience is a key part of life. In business, its importance is compounded. While using key performance indicators (KPIs) has long been the norm, merely glancing at historical data is now not enough in strategic planning.
Examining the here and now can be even more beneficial, as the current status of the business can often be the first sign as to which decisions need to be made.
However, this is by no means easy. Thanks to the advent of big data and complex reporting, enterprises now have more to measure than ever.
Rather than getting lost in a swathe of information, knowing what to keep an eye on and channelling those insights back into the wider strategy of the company is where the real skill lies.
The key question to ask is; what are the key success factors for the business?
Getting these wrong from the start can be incredibly detrimental in the long term. Research from PricewaterhouseCoopers (PwC) has outlined that the number one performance indicator for the vast majority of businesses will be based around finances.
This can be relevant to a big portion of the business, but it isn’t necessarily the be-all and end-all when it comes to gauging strategies based around improving customer experience or attracting and retaining the best possible group of staff.
Furthermore, PwC goes on to evidence the fact that enterprises will often decide on a set of KPIs and not allow them to morph over time. The business world in general is becoming more fluid, and companies which are adaptable make it easier to take on information that may not have been made available when their strategies were first devised.
While KPIs should be adaptable over time, the way they are measured should remain as close to any original strategy as possible. In doing this, businesses can allow themselves room for manoeuver but also ensure that the basics of putting any insights to good use can still be done effectively.